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Payday lending is a plague
TweetPayday lending is a plague
EDITOR:
In his Oct. 20 letter, Tim Miller, communications director for the Center for Consumer Freedom, a front for the payday lending industry, urges voters to protect personal rights by allowing payday lenders to continue operating in Ohio.
Being preyed upon in a time of need by usurious lenders charging 391 percent interest is not consumer freedom. The “right” Mr. Miller is seeking to defend is not yours or mine, but an unscrupulous industry’s self-proclaimed right to take advantage of hard-working consumers by ensnaring them in a debt trap that ultimately drives many into bankruptcy.
Payday lending, like its sister predatory mortgage lending, is a product of our 15 year bender with laissez faire, buyer beware, capitalism. The hangover from the predatory mortgage excesses, including foreclosures and tight credit, will plague us for years. Many economist see unsecured credit, which includes payday lending debt, as the source of our next financial crisis.
Fortunately, Ohio legislators in a remarkable display of bipartisan foresight passed House Bill 545, one of the most comprehensive and progressive pieces of consumer legislation in the country to eradicate the toxic effects of payday lending and protect Ohio consumers by capping the allowable interest rate on small loans at 28 percent.
Funded by millions of dollars from out of state companies, the payday lending industry is now seeking to repeal House Bill 545 through referendum.
Don’t allow them to succeed. Vote “YES” on Issue 5 and protect the law that will protect you, your family and your community from these predators by outlawing payday lending in Ohio.
JAMES B. CALLEN
Mineral Ridge
Boardman levy is clearly a matter of public safety
EDITOR:
On behalf of the Boardman Fraternal Order of Police Lodge 43, I strongly urge all Boardman Township residents to support the upcoming Police and Fire Levy by voting yes on Nov. 4. We are pleased that this levy has the endorsement of both the Boardman Civic Association and the Boardman Business Advisory Committee.
Just two years ago, Boardman Township had 63 full-time police officers. The U.S. Department of Justice says that a community Boardman’s size should have 76 officers to provide adequate service and protection. Due to unfilled retirements and resignations, the Boardman Police Department currently has only 51 officers from the chief down. Several more officers are anticipated to leave in the next few months.
With the passage of this levy, the township trustees have stated that up to 10 police officers will be hired, and 6 laid off firefighters will be called back to work. The hiring of new officers will ease critical staffing shortages as well as enhance the police department’s ability to conduct much needed proactive crime prevention activities, as opposed to just reacting to crime that has already occurred.
Despite these tough economic times we are all encountering, the passage of this levy is important for the safety and well-being of our community.
Please support your police and fire departments Nov. 4.
DARYN TALLMAN, President
Boardman FOP Lodge 43
Boardman
Comments
Mr. Callen's letter demonstrates he knows little about the payday lending industry. It has nothing to do with the mortgage lending crisis and to try and draw a parallel between the two is ridiculous. The payday industry was created when banks refused to grant unsecured, short-term loans, and payday lenders filled the void. There is a tremendous need for these types of loans as their growing popularity indicates. Millions of customers use them for emergency expenses and 95% pay them back on time. Ohio lawmakers acted out of selfish power mongering not concern for citizens on HB 545. Vote NO on Issue 5!
This is silly.I fail to see where a short term 2 week small loan drives anyone into bankruptcy,but if it did how does the lender benefit?You are making it sound that the lender wants to hurt there customer and set them up to fail.This is an overreaction by the politicians and it might be something that a few of them may be givin there walking papers over.The facts are people want to make there own financial decsions.HOW CRAZY IS THAT IDEA? VOTE NO ON 5
Who has endorsed a “NO” vote on Issue 5?
· The Ohio Chamber of Commerce
· Ohio Grocers Association
· Ohio Christian Alliance
· The Coalition Opposed to Additional Spending and Taxes (COAST)
· Americans For Prosperity
· Dr. Tom Lehman, Buckeye Institute for Public Policy Solutions
· Property Rights, Freedom Fighters
· National Taxpayers Union
· Ohio Libertarian Party
· High Impact Leadership Coalition
· Call & Post – Ohio’s largest African American newspaper
· Lake County News Herald, Lima News, Hillsboro Times, The Newark Advocate
· Hundreds of other Ohio consumers and businesses at www.Ohioans4FinancialFreedom.com
!!!VOTE NO on 5!!!
You see it does when you continue to borrow ahead of yourself. I have always thought payday lending was a terrible idea, and business. People need to learn to live within their budget. I know some commericals talk about if their child gets sick they can go there to borrow the money til payday. You can also explain your situation to the doctor's office and they will understand, and put you on a payment plan. They will not charge you some rediculous amount of money. Just about anywhere will work out a payment plan with you. All you have to do is ask.
You guy do realise a vote no means you do not want it regulated, by voting yes it will be regulated. I will be voting YES in favor of regulation of payday lending places!
This is what Issue 5 does:
It caps the interest rate at 28%.
It helps break the cycle of debt.
It gives borrowers more time to pay back loans.
It does not mean an end to 6,000 jobs.
I mean honestly why would any one in their right minds want to pay 391% on borrowing money instead of 28%. This business is an $85 billion industry, so i think they can give their customers a break on the interest rate!
dmets--- "This business is an $85 billion industry..." So by this viewpoint....any business earning over a certain smount should "give their customers a break" as you say? Do you feel that way about the traditional banks?? B/c in 2006 they earned 53 BILLION DOLLARS in bounced check fees, late fees and daily overdrawn fees. 53B for only those!!!!
Do you think the gas companies should give us a break by cutting into their profitability? Retailers? Food Industry? Airline Industry? Toy and Book Industries? Auto Industry?
Companies exist to make a profit!! Business 101. And PD lenders profit compared to the top 10 banks in the US is 1/3 of theirs!! Top 5 PD lenders 6% vs Top 10 Banks 18%. So who exactly profiting more?? And for comparision sake-- IHOP's is 12.6%. Hmmmm, PD lenders profit is MEASELY compared to 12.6% and 18%!!!
And as for 28%? Why has no bank or credit union stepped up and stated they will start writing similiar loans under the new law??? Hmmmmm......Consider the difficulties payday lenders face to stay in business under a law that limits their interest rates to 1.08% for a two-week loan. That is, if you take the new 28% yearly interest rate and divide it by 26, you get 1.08%, which is what lenders will be allowed to charge per every $100 they loan. Under the old Ohio law, they could charge up to $15 per $100 borrowed, or 15%.
So..... in case you are missing the point....
28% on a SHORT TERM LOAN IS NOT PROFITABLE!!!! For any business
And oh yeah-- you may want to read this too:
“A new report has been released that backs up the claim that the payday lending “reform” legislation passed earlier this year will result in significant job loss across the state. Backers of this legislation deny this, but it seems the data doesn’t support their contention.
The report by William D. Keip, President of Keip Government Solutions, concludes the following:”
10,308 Total Ohio jobs lost
6,000 PayDay Lender jobs lost
$497.2 million Economic Activity
$218.5 million Total reduced earnings
$145.6 million Reduced earnings-direct PayDay Lender jobs
$262.0 million Total reduced spending
$ 16.7 million Loss of state/local Ohio taxes
http://www.buckeyeinstitute.org/blog/...
!!!Vote NO on Issue 5!!!
"Lenders charging 391 percent interest is not consumer freedom."
It is legal loansharking that robs families of financial resources. The rich lenders get richer and the poor get poorer.
Stan--
how can you justify your statement "the rich lenders get richer and the poor get poorer" when PD lenders make a profit 3x LESS than traditional banks. Are you angry at the banks for their profits too? Or is it just (mis) directed at PD lenders?
And for the last time--- a one time loan is not 391%!!!!
If you go into a PD store today and borrow $100, the fee is $15. So in 2 weeks you will be required to payback $115. FACT!! It's a short term loan and should not be confused with 52+ week loans and a regular APR, since it's a different type of product.
A PD loan is certainly cheaper than bouncing a check since BankRate.com just released a staggering figure--- Average Bounced Check Fee nationwide is $28.95!!!! WHAT?!!! So PD loans are a less expensive alternative to highway robbery.
If you rent a car for a day and it costs $29.99, do you compute the annualized cost to rent it??? Uhhh no!! It's intended to be a SHORT TERM rental.
Financial freedom is having options available and making the *best choice* for your individual needs. It does not mean eliminating viable options, especially when the economy is in such a horrible state.
***Vote NO on Issue 5 in Ohio!!***
Vote Yes. The house bill capped the interest rate at 28%. It was the companies themselves that decided to close up shop because they would not cap their interest rates. Deal with the 28%, what is so wrong about that? They are predators, praying on those that can not get a conventional loan. If you can't operate on 28% interest cap, then you should get out of business.
Atownparent---
(1) Banks and credit unions do NOT OFFER no collateral short term loans.
(2) 28% is not profitable for ANY BUSINESS which is why not ONE BANK or CUnion has stepped in and said "we'll write these loans under the new law" NOT ONE in OHIO!
(3) Why are you not ranting and raging about the bank's fees? Interest? Profits?
(4) Why do you care where, why and what I spend my money on? If I choose to cash my check and blow it all on alcohol-- no can stop me. Or maybe I should blow it all on keno instead. What gives you (and the Ohio General Assembly) to limit my financial rights?
VOTE NO on issue 5!
Now you are claiming financial rights? I doubt you were the first in line to develop this predatory lending so you can't claim that it is a financial right. Borrowing beyond your means is exactly what got this country in the mess it is in. I applaud the legislators in Ohio for taking the first step in getting the credit mess back under control. If only our federal government would do the same.
If you can't make a profitable business with a 28% mark-up, then you should not be in business.
Cash your check and blow it on whatever you want, but don't confuse the two situations. Cashing the check and taking the money you have is one thing, but borrowing money that you do not have is something else. How is it that people are so stupid to think this is a financial option? It is this mindset that has cost so many people their homes. Use your brain, borrowing what you do not have is not the answer. Start living within your means.
I don't rant and rave about bank fees because I am not charged any - I keep the appropriate amount in my account, I use my bank's ATM and when needed use my check card for no fee. If you don't like your bank's fees, then switch banks - there are plenty of options out there.
Banks don't charge 391% interest on their loans...NOT ONE in OHIO. Most of their customers also don't just take out one loan and pay it back in two weeks either...so you can toss your $15 dollar fee out the window. Most people get caught in a vicious cycle of loans which leads to 391% interest. Remember, the new law won't shut these businesses down...only the business owners themselves can do that. The law will only protect the consumer. These businesses can still operate, just not at an incredible profit margin.
Payday loans are bad for everyone. People survived before they were ever in existence...they can survive again without them.
Kcm: people who use these payday lenders need to learn to live within their budget. As for needing money for the doctors, or to get your car repaired or pay your utilies: All you need to do is call the people or talk to them before hand to arrange a payment plan schedule. Anyone will work with you if you talk to them. They also will not charge you 391%. As for you asking about big businesses making big money. I'm sure you were ticked off about gas prices, and to see the record breaking profit for the last quarter, when gas prices are through the roof. Yes I do think that these big companies are full of greed and need to NOT have tax breaks, and DO need some kind of regulation. The payday lenders are racker their customers over the hot coal, and they should not be doing that. They are a legal version of a loanshark. Last time I looked those kind of dealing were illegal and there are many in jail cause of it!
I already voted yes and I don't understand any person who thinks 391% is a fair interest rate. It's exploitation of the poor and that's pretty sick.
learn how to take care of your money,loosers! pay the bills first then go an get drunk!
U-S-U-R-Y
It used to be criminal.
Free market? Or a free pass for the strong to take advantage of the weak? Is it capitalism at its best or just another form of predation?
Doghead hit the issue right on the head. It is a cycle. People aren't just getting money, then paying it back. They are getting money THEY DON'T HAVE, then paying it back, then taking out another loan to recover for paying last pay check's loans, and so on, and so on. So people end up paying 30 dollars a month indefinitely for a loan they took out once.
Then, when they are short one paycheck, and can't pay it back, that is when the obscene interest rate really shows itself. So they payment that was $15 snowballs into something greater. THIS is why this industry needs to be regulated.
************VOTE YES ON ****************
Everyone keeps mentioning the annual rate.. there is no annual rate, these are 2-3 week loans, and you are charged a percentage of what you borrow over that time. If you encounter a problem and it takes you longer to pay the loan back, the amount you pay back is the same. It seems to me that the people opposed to this are people that have no use for the service, which would then make their opinions on the matter pretty useless. Knd of like asking a single person with no children what they think of a teacher within the school district, or asking the parents of a little boy their opinion on the girl scouts..
i've been in this lending trap and worked my a@@ off to get out. i am GLAD ohio has a chance to cap the loans. all you who are seeing these as "just 2-3 week loans" are missing the big point. these loans turn into an extention, or another loan from another company to pay the first one off and back the next day to get the original cash back because you don't have it. when i asked for a payment plan to get out, i was laughed at and told it was all or collection and they'd run my check so it would bounce my account.
these loans are good, unfortunately, for people who are NOT at the bottom of the pay scale, the people these companies profess they are helping. it's a trap. and their tactic of voting no is another cheap deception that i would expect from them. no means yes. yes means no. especially when so many tax levies are voted on by people looking for yes or no. with this, if they don't see what the issue is about, they can and will assume it's a levy and will simply vote no...which means yes. this is "good regulation". vote yes, so you can say no!
Payday loans are very good for the predators!
LEGALIZED LOAN SHARKING !
http://i33.tinypic.com/353cppz.jpg
Why don't we just give the poor and ignorant more free stuff because they are so persecuted against...oh wait.
Here's an American ideal that has been in place since we began: Ignorance is not a defense. We cannot protect the ignorant against every damn thing they face in society.
You are supposed to have savings for emergencies. You are supposed to question the lender and get the details when they are so eager to loan you money. You are supposed to work harder and gains skills that lead to higher wage amounts, thereby decreasing the need for such loans.
You want the government to tell the private business how long the borrower has to pay back the loan? More government control of the private sector, because the ignorant cannot function in this society.
Legal Loan Sharking is an oxymoron. If the legislature has not deemed 391% APR to be too high then it is not loan sharking. By defintion loan sharking contains the terms "ILLEGALLY high interest rates".
Most would agree that payday lending is a loan of last resort. If you are on a trip and running out of gas, a gas station appearing at that moment selling gas at $12.00 per gallon would be repulsive. What choice would you have but to buy it ? Preying on the helpless in society needs to be controlled !
STOPPING PREDATORS MAKES SENSE ! OREGON IS TAKING CONTROL ALSO !
http://www.ospirg.org/issues/consumer...
If you are on a trip, you should have planned ahead for all potential financial obligations. If you need to take a payday loan to pay for gas, you should not have been on the trip in the first place. That is the fundamental difference between where our country was and where it's heading. People used to act within their means because they had to, now they are called "helpless" if they cannot take that trip and they want help.
Welcome to the future.
Well DrGonzo:
You missed the point. I'll try to explain. When the need arises and the place to satisfy that need is limited gouging results when there are no controls.
Dmets, not all of us are lucky like you, we don't live in Compass West Welfare Apartments and only have to pay $15 a month for our rent. Some of us are hardworking, non-welfare recipients, who need help every once in awhile to make ends meet.
If we all were lucky, we could live in a $15 a month apartment with Electric subsidies, but some of us have to actually work for what we get.
YoungstownMom:First of all how dare you assume that I live on welfare, or in compass west welfare apartments. I was a hard working wife, and mother of two until feb of this year. Not that I need explain myself to you, but my husband makes enough money for me not to work, and be a stay at home mom! We do not get any kind of assistance and never have. We are a hard working middle class family! We live with in our budget! So please get over yourself!
Me no comprende.
I had a friend that was stuck in 2 payday lending while her husband was off work. It makes no since because it took her 1 yr to get away from them. I hate to see people losing their jobs but at the same time these people are ripping them off w/391% interest come on. I never used them and I voted NO for ISSUE 5. I hope they go BANKRUPT!!
By the way DMETS you are the one who needs to get "over yourself". All you do is moan and complain about EVERYTHING, and when people do not agree with you, you bash them.
Sorry I INSULTED you about being on welfare. You are probably from one of the suburbs. Some of us have to work for what we have. We don't have the luxury have forcing our husband to work long, hard hours so we can stay home on our BUTTS and do nothing. You may not be on welfare, but you definitely are not better than they are. You both stay home on your BUTTS and get things handed to you.
by the way dmets: You stated that no one will lose there jobs if Issue 5 passes, well yet again, you are wrong. Cash advance in Ohio will be closing 1/3 of their stores and laying of 200 people. I guess since you have things GIVEN to you, 200 people who have families they are trying to take care of is not important.
And the only people you should be blaming for that are the Cash Advance executives who made the decision that they could not operate unless they are charging outrageous percentages on people who need the cash. If her husband works and is lucky enough to get paid enough so that she can stay at home with her kids how is that like being on welfare and sitting around on their butts? You make no sense. By given, you must mean working hard right, or that her husband is well educated enough to get a higher level job right?
Atown Parent: Do you even know what you are talking about? Good for him if he well educated and has a higher level job. Why does he need to work so she can stay home. Go out and get a job to help with your family. Stop using the excuse "I AM A STAY-AT-HOME MOM". Why should the husband have to work like a dog and miss out on his family so she does not have to work.
By the way, if you don't like the Cash advance places, don't go there. Don't ruin everyone elses chance to make their own ends meet. If they default, that is on them. You don't have to pay it back, you don't have use any of your money to help them. So what gives you the right to decide how people should spend their money. The government already has enough being said on how we live our life.
Of course, if it was something that you used or needed, or even if you worked there, we would not even be having this conversation. People should have the right to lead their own lives and stop having people who THINK they know better dictating on how it should be done.
I personally do not use those places, but I feel they have the right to do what they can to help themselves.
YoungstownMom: I do not force my husband to work long hard hours. He works a normal 8 to 5 job, and is the one who suggested for me to stay at home. As for me, I do not sit on my butt, that is just another assumption you are making. I am a very active mom. I am always doing things with my children, volunteering at my one son's school, and many other things. What i get to do is priceless. You also do not understand one thing about me. I am a very driven person, I am staying at home to raise my family instead of having someone else do it. We had children to raise and bring up ourself, not to have someone else do it. I am nothing like someone one walfare. I do not moan and complain about everything, just when people are being robbed blind by legal crooks! Sounds like someone may be just a little jealous.
AtownParent: Thank you for backing me up.
As if I have to explain anything to you, it is good you can stay home. Too many kids are being raised by Daycare and School and our children have lost all morals and accountability. There are too many teenagers who get into trouble and have parents who refuse to have them held accountable.
I, myself, work from home. I support my family so my husband can get his Degree at YSU. I chose to work from home so I can still be there for my kids, yet make enough money to support us all.
I also agree with you that, especially in Mahoning County, there are way too many crooks trying to get just one more over on you.
It was not my intention to insult anyone. I feel very strongly about our children and their future. I just seen it too many times that men miss out on their kids growing up because some MOMs want to stay home and not help out.
My deepest apology for offending you.
Thank You very much. I would not have quit working if my husband had to work long hours and miss out on everything. He has not missed out anything with the children.
You are very welcome. I commend you for thinking of your children and husband. That takes a lot for a woman in this day and age. You are definitely someone that this younger generation could take a few notes from.